President Joe Biden said Friday he would block the $14 billion acquisition of U.S. Steel by Nippon Steel of Japan, citing national security concerns.
“It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad,” Biden said in a statement reported by media outlets. “And it is a fulfillment of that responsibility to block foreign ownership of this vital American company.”
His decision came after a federal committee deadlocked on whether the transaction should move forward. The Committee on Foreign Investment had said it could result in lower domestic steel production, representing a national security risk, but made no formal recommendation. That left it up to Biden to determine the fate of the deal.
“As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains,” Biden said. President-elect Donald Trump has also opposed the takeover.
Nippon Steel had said it addressed the panel's concerns and made key commitments to grow U.S. Steel and protect American jobs. In December, Nippon sent a letter to CFIUS that accused the White House of “impermissible influence” in the process, The New York Times reported. Nippon said the committee's concerns were “littered with factual inaccuracies and omissions, misleading and incomplete statements, conjecture and hypotheticals that have no basis in fact and are plainly illogical.”
Nippon faces paying a $565 million penalty to U.S. Steel over the collapsed deal and has said it would consider pursuing legal action against the U.S. government.
The proposed sale came amid a growing demand for domestic steel. Prices have soared globally as production capacity has fallen short of need.
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